Tuesday, January 22, 2008

Economics 101

I'm going to be brief. It's late and I should be in bed.
Thanks to Brunsli I was motivated to actually look at my retirement account. I do this far too infrequently. Shamefully, I have not been very proactive at all about managing this account even though it is the largest nest egg I have for the future. I don't even contribute to it anymore. When I left academia, I stopped depositing into this account and started a new one with another employer who worked with a different company--tomorrow's project is finding the info for that one.
Anyway, I have had a policy of benign neglect towards this money. I'm not clear on its terms--when I got it I was given a now forgotten explanation of why it couldn't be rolled over and somehow remained tied to the state of Tennessee. Making the best of it, I rationalized that meant I wouldn't be tempted to do anything wacky---like withdraw from it. I haven't really paid close attention to its distribution and when I left the University of Memphis the financial advisor stopped contacting me. I was surprised when I saw that I had the investment profile of a Golden Girl. There were several more aggressive funds that had yielded SUBSTANTIALLY higher rates of return than my spread.
Why the newfound interest? Since last week, I've been scared witless by all this recession talk. One of the first classes I took in college was Economics 101. Granted it was not a bright spot in my academic experience and I went on to do just as poorly in Economics 102--though strangely enough I got an A in the upper level econ course I was required to take for my major. My poor showing was largely due to my inability to make the same 'rational' decisions my textbook said people would make in the hypotheticals presented. And it seemed irrational to me that if I didn't think the way the theory predicted and I knew plenty of other people didn't make decisions the way macro- and micro- economic theory said we would, that it was IRRATIONAL to conclude that something was wrong with me instead of the theory...
But I digress. The most vivid memory I have from Econ 101 is a realization that American economics are cyclical in nature. I remember sitting in lecture, considering the gaps between previous downturns in the market, and making a mental note that we were due for one right around...well, now. I couldn't have imagined all the things that would happen to me between then and now. I figured by now I'd be a homeowner, a parent, and pretty well into a specific career. That isn't the case. I won't recap.
So I find myself unable to ignore all the recession rumbling because I am currently on track to become a sweet, old cat lady. Social Security is shot to hell. So being pragmatic, I realize I need --to paraphrase Wu Tang Financial-- to protect my neck. So I am. Finally.
Protect yours too...the sky may be falling...or at least sagging a little.

4 comments:

Mr.Slish said...

Ummm Can I have ten dollars...

Koffee Dyme said...

oh wow.... also your hair is gorgeous....

brunsli said...

Why don't you see if you can roll that money into your current 401K account, or into a rollover IRA at you current bank so it's not neglected?

CHIC NOIR said...

I think "finance" should be a class taught in high school(it should be mandatory).